Renting a home has its advantages e.g., you have the freedom of picking up stakes and moving at will. On the other hand the advantages of homeownership have benefits far outweighing those of renting. Further increase in equity that comes from updating your home from time to time and reaping the benefits of normal market appreciation are the two advantages we all know about. The third and often lesser known benefit is ‘Tax Benefits’ that come with purchasing a home. Let’s list and explain some of the tax benefits.
1. A proportional reduction in your tax liability will happen when you pay principal and interest every month on your loan. The reduction in your mortgage interest due to such monthly payment avails such a tax benefit for you.
2. Paying property taxes after purchasing a home can add on to your overall income tax deductions.
3. Your mortgage insurance premium is deductible if it is included in your loan. Another necessary condition is that your income has to come under qualification bracket. With both such conditions fulfilled, your tax liability gets lowered.
4. Solar panels and wind turbines are some home improvements which can increase your tax deduction, as they come under eco-friendly home improvements. Having eco-friendly improvements done on your home qualifies you for a percentage of tax deductions.
5. Your tax liability can get reduced if your business is home-based and you have some home improvements associated with it. You can get added tax deductions through the square footage percentage of the space on which your business is conducted.
If you want to secure your financial future by owning a home, contact us. We will be more than happy to help and guide you.